GM, DaimlerChrysler in fuel cell deal with government

DETROIT -- DaimlerChrysler AG and General Motors have joined with the U.S. government to build fleets of fuel-cell vehicles for on-road testing over the next five years.

GM is spending $44 million, and the Department of Energy is kicking in another $44 million, to build 40 fuel-cell vehicles. The automaker will put the vehicles in Michigan, California, Washington and New York.

DaimlerChrysler says it is spending $70 million on the project, and has a range of fuel-cell vehicles in development. They include fuel-cell variants of the B-class car and Sprinter van.

The government-industry program is an effort to help speed up the development of clean-running fuel-cell vehicles.

Fuel cells generate electricity from the chemical reaction between hydrogen and oxygen, with only water vapor as the exhaust. The auto industry sees the technology as a key way to take it out of the debate over air quality.

But many hurdles remain to be cleared for the technology to be used in mass production. The foremost obstacle is the cost of the fuel cell, which needs to be reduced to one-tenth the current level.

Other challenges include the capability to store enough hydrogen on the vehicle to give it a range of about 300 miles, and maintaining performance of the fuel cell in extreme hot and cold weather.

Another key obstacle is the availability of hydrogen to refuel the vehicles.

To that end, Shell Hydrogen LLC said it will support GM by setting up five hydrogen refueling stations in Washington, D.C., New York City, between Washington D.C. and New York and in California.

Other partners in the GM program include the U.S. Army at Ft. Belvoir, Va., and Quantum Technologies in Lake Forest, Calif. Both will provide facilities to store and maintain GM's fuel cell vehicles.